Ive came across this house for sale its in Deer Park area in Melbourne and its 18km from the cbd. Its close to train station, school, shopping centre and easy access to the freeway. Theres even another big freeway being develp but will be finished at the end of 2009 so that might increase the area up again. The area median price for 2008 is $255k and its capitail gain trend per year is looking around 8.7%. The rent around the area is going for average $250 per week depending on the location. This house is on a 700sqm corner block and has plenty of space at the back to build a townhouse behind it. The only problem is that the existing house is really old.
So if i buy the place i wont be able to rent it out because its too old or no one would want to live in it. The house is the ugly duckling of the street, i think thats a good thing because it has potential. Any suggestion on what i should do or advice. thank youSav
Hang around the shopping area for a few hours at night and tell me how you feel. Yes I can see some positives in Deer Park and it location to CBD also, but it has a few downers. Its reputation is not that great (but as an investment is this something that we can account to $$). Demolishing is costly so basicly you have a 700 2m block in the west for $255k with an old house on it that will cost you around 5-8 k to get rid of, then you have got a vacant block. Try reselling it. If you can fix the old place up and get say 180 -200 p/w it wont be the Hilton but plenty of people & student out that way may think its OK. Also look at how long its been on the market for, may give you some idea if it such a bargan.T…………
Tony B wrote:Sav
Hang around the shopping area for a few hours at night and tell me how you feel. Yes I can see some positives in Deer Park and it location to CBD also, but it has a few downers. Its reputation is not that great (but as an investment is this something that we can account to $$). Demolishing is costly so basicly you have a 700 2m block in the west for $255k with an old house on it that will cost you around 5-8 k to get rid of, then you have got a vacant block. Try reselling it. If you can fix the old place up and get say 180 -200 p/w it wont be the Hilton but plenty of people & student out that way may think its OK. Also look at how long its been on the market for, may give you some idea if it such a bargan.T…………
The owner wants 226k , i forgot to mention how much it is. I think its a bargain especially 18km from the cbd you wont find any cheaper. Thats what i think but yeah the house is pretty old.
Hey Sav,
that's a nice block of land to "land bank" for future development. For now though, can't you reserect the house to become a renter? If you can spend say around 10-15 K to bring it up to scratch, at that price (and that's asking…..you may get it for less) it's looking good.
Is it vacant now? How long has it been since it was occupied? How far from the train?
michaelparis wrote:Hey Sav,that's a nice block of land to "land bank" for future development. For now though, can't you reserect the house to become a renter? If you can spend say around 10-15 K to bring it up to scratch, at that price (and that's asking…..you may get it for less) it's looking good.
Is it vacant now? How long has it been since it was occupied? How far from the train?
I only got 25k in the bank for a deposit so it all depends on what the vendor will settle for so i have money left over to fix up the place. I dont know how long it has been occupied but i must addmit i would not set a foot in there myself if i was a renter. I think theres too many things to fix inside and out so it might cost alot more then 10 to 15k. The train station is like only 5 to 10 mins away if you walk.
Have you got pre-approval from the bank? If so, to what level will they let you borrow? If not, why not?
What exactly needs doing. Is it major structural work? Or cosmetic?
Can you look at buying in partnership with someone and develop in tandem later?
More questions for you. But that's the only way we can help with our opinions.
michaelparis wrote:Have you got pre-approval from the bank? If so, to what level will they let you borrow? If not, why not?What exactly needs doing. Is it major structural work? Or cosmetic?
Can you look at buying in partnership with someone and develop in tandem later?
More questions for you. But that's the only way we can help with our opinions.
Thanks for the tips and advice but sorry to say the property is off the market……
its under contract at the moment…….i was too late to take the opportunity. Thats what happens when you hesitate on a opportunity……back to searching for another place. I want to purchase it but did not know what to do with it to maximise the benefits.Next……..
Don't worry Sav. At that price a developer has bought it most likely.
Keep looking. Keep learning and keep asking. And……..keep saving.
Also make sure your finances as far as borrowing limits (including purchasing costs) are in order.
Sav
Mate, dont be disapointed. Keep a clear head and dont get sucked into this property investing thing. Focus on the facts, it was a shit hole ready to be condemded. If you had of "fixed it up" the tenants have the right to live in a livable & safe house. You would have been there every weekend fixing things up. Sav 25k is a small deposit then you would have had no cash at all in your kit.If in future you see a property you may like get the sec 32, dont take shit form the agent they have to give it to you. See if you can find out if they own it or under finance how long they owned why are they selling it etc. Do you know how much the same size block is selling for 12 km down the road, I dont think so, try $180-190k. You pay stamps on that old house for nothing. If you cant live in it why buy it.
Dont be disapointed just because it sold fast does not mean it was a bargan. Go with your gut feel man. As far as a land bank goes if your paying 9.5% intrest in a softing market it may be a long time before you even get close to covering your intrest payment. There's 20k intrest before expences if you held it for 5 years only, you would have to sell it for 330k before costs just to break even.
Could you have afforded $385 per week in repayments.(intrest only) Keep an eye on it Sav just because it under contract DOES NO MEAN ITS SOLD. Important to remember dont rush into the next one because you missed this one. To find a bargain takes a hell of a lot of work in the current market. Have a look at some of Scamps listings a bit exagerated but none the less true.
Cheers
T…………
So if i buy the place i wont be able to rent it out because its too old or no one would want to live in it. The house is the ugly duckling of the street, i think thats a good thing because it has potential. Any suggestion on what i should do or advice. thank you
its under contract at the moment…….i was too late to take the opportunity. Thats what happens when you hesitate on a opportunity……back to searching for another place. I want to purchase it but did not know what to do with it to maximise the benefits.You must be logged in to reply to this topic. If you don't have an account, you can register here.
